Coalition 'hid' 1m job losses in Budget - Labour

Published on Wednesday 30 June 2010 19:49

THE coalition government was accused yesterday of hiding the true impact of its austerity Budget, after a leaked Treasury paper suggested that 1.3 million jobs would be lost as a result.

The revelation dominated Prime Minister's Questions as Prime Minister David Cameron was pressed time and again on the figures.

Mr Cameron claimed that Labour had "scored a spectacular own goal" because separate figures published by the independent Office of Budget Responsibility (OBR) revealed there would have been more job losses under their spending plans.

The OBR predicts job losses in the public sector will total more than 600,000 by 2016 as widescale spending cuts are imposed to address the UK's record deficit.

Extra private sector jobs will see overall employment rise by just over one million by 2015 - slightly lower than forecast by the independent watchdog before last week's Budget.

The OBR brought out its calculations a day early after leaked figures appeared to show the Treasury expected unemployment to rise by 1.3 million because of the Budget measures.

This has led to questions over how independent the OBR, which is based in the Treasury and served by the Treasury press office, is or whether, as some opponents claim, it is an arms-length organisation for the government.

In the Commons acting Labour leader Harriet Harman warned of "abject misery" in the jobs market.

But Mr Cameron insisted that making projections on employment and economic growth was no longer the job of the government but the independent OBR.

He pointed out that, according to the OBR, there would have been 150,000 less public sector jobs by 2012-13 in the UK under Labour's plans than under his government's.

However, the same figures suggest that by 2014-15 the situation will have reversed and there would be 150,000 less public sector jobs under the current government's proposals with 4.92 million compared to 5.07 million.

Mr Cameron insisted that at the same time two million jobs would be created in the private sector.

According to the OBR, overall employment will be 29.97 million by 2014-15 - compared with the 30.02 million it forecast before Chancellor George Osborne unveiled his tough measures.

That equates to an extra 1.57 million more private sector jobs.

The government has said it is vital to "rebalance" the economy away from an unsustainable reliance on the public sector if the economy is to recover from the recession.

At Commons question time, Ms Harman seized on the "secret Treasury analysis" to attack the government's strategy of cuts to public services.

She repeatedly asked Mr Cameron to publish the analysis.

And she mocked his response in attempting to ask her what Labour would have done.

"You can always tell when he [Mr Cameron] doesn't want to answer the question, he asks me a question instead," she said.

"Unemployment is going to be higher than it would have been because of his Budget."

But the Prime Minister hit back, claiming again, that his government was having to sort out the mess Labour left behind.

"There are going to be more people in work," he claimed.

"Every Labour government leaves office with unemployment rising and we will make sure it falls again."

The theme of cuts was continued with a series of questions from Labour backbenches.